Shipyard retirees received a shock in the form of a letter regarding their health care last week. Newport News Shipyard, now a division of Huntington Ingalls Industries, informed Medicare-eligible retirees — those aged 65 and older — that they would no longer be part of the company's group plan, effective Jan. 1, 2014.

"It was just a total surprise," said Newport News resident Jack Gergely, 70, who retired from the shipyard 10 years ago.

Shipyard spokeswoman Christie R. Miller said the move to independent plans would reduce administration costs for the company.

In order to maintain nonstop supplemental coverage, the shipyard directed salaried retirees to contact Extend Health, a health-care benefits advisory company, which has conducted transitions in coverage for DuPont, GM, Ford, Honeywell, 3M and Caterpillar in recent years.

"I will say I think it's happening with a lot of companies," said Lisa Walker, a Medicare consultant for Bay Aging. The benefits advisory company takes inventory of retirees' personal information, health status and prescription medications, in order to help them find an individual supplemental insurance plan to best suit their needs.

"They've dumped us. They're acting like we want this," said Ashton Haywood of Hampton, who retired from the shipyard in July 2001. He referenced the letter that led with, "We have heard from Huntington Ingalls retirees that the one-size-fits-all Retiree Medicare Supplement Plan may not be meeting your individual needs." He expressed shock and disappointment. "Benefits are part of your pay. Current employees are taking a de facto pay cut. Their word means nothing," Haywood said. "God knows how much more it's going to cost us."

The Harris family has ties to the shipyard that span generations. "It's scary to go out and look for new insurance," said Newport News resident Shirley Harris, 75. Her husband, Wayne, retired from the shipyard after 35 years. "At least I feel I've taken care of you," he told her before he died from asbestosis, a couple of years later, in 2002. "We've had good coverage. At one time we didn't pay anything, including premiums," said Harris. "I don't know how it's going to affect us. We don't know if it will be more or less. Of course, it's not going to be the same," she added. Her brother and son-in-law also have multiple years of shipyard service between them.

Harris also expressed concern about those in poor health who might not be able to follow the requirements set out by Extend Health (soon to become Towers Watson) before making an appointment. Even if they can gather all the information they require — lists of doctors and prescriptions — the phone appointment is scheduled to take up to two hours. Additionally, each person must apply individually, so Medicare-eligible spouses must choose a separate plan for their 2014 benefits.

Huntington Ingalls is presenting the change as an opportunity for more flexibility, more choices, and the chance to customize plans. "In many cases, these plans will be offered at a lower cost," informed a letter signed by Bill Ermatinger of Huntington Ingalls.

After a pre-interview with Extend Health, Gergely was mostly worried about finding an insurance plan that included his current doctors. "This is almost like the HMOs. The biggest worry to me is how limited we're going to be. Our coverage is fantastic now," he said.

The Extend Health literature informed recipients that the information pertains to retirees, spouses of retirees, and surviving spouses of retirees who are 65 and older. Spouses under 65, and eligible dependent children, can remain on the Huntington Ingalls Retiree Health Plan, as long as the retiree signs up through Extend Health. Retirees are advised that if they do not enroll through Extend Health, they will not receive any Medicare supplemental coverage through Huntington Ingalls after December 2013, and their dependents younger than 65 would not be able to continue their coverage through the company; they may also be subject to Medicare Part D late enrollment penalties if their prescription drug coverage lapses.

"I can't go out and look on my own," said Haywood, whose wife is not yet 65.

Under the new arrangement, retirees who currently receive a company subsidy toward the cost of their Medicare Supplement Plan, will be enrolled in a Retiree Reimbursement Arrangement. The account can be used to pay for premiums for Medicare Parts B and D and also Medicare supplemental benefits; any remaining funds roll over at the end of the year.

All retirees affected will pay their premiums directly to the insurance provider, and those eligible for reimbursements will receive them through Extend Health rather than the shipyard.